The Earl of Balfour: Perhaps I may ask the Minister to look at paragraph 5 of the new schedule. It is a long time since I have been in North Wales but I know that Manchester used to be supplied with most of its water from reservoirs in north Wales. I would imagine that part of the purpose of the amendment is to cover the cross-border functions in that case. Furthermore, although I may have misheard, I am not sure that the Minister made any comment on Amendment No. 196B, which stands in the name of my noble friends Lord Stanley and Lord Courtown.

Lord Williams of Mostyn: I rise simply to help and not to be discourteous. I did say that I would respond at

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the end when I had heard what the noble Lord, Lord Stanley of Alderley, had said, rather than presuming to answer him before he had said it.

The Earl of Balfour: I am grateful to the Minister. I just wanted to say that I feel that Amendment No. 196B is extremely sensible.

Lord Stanley of Alderley: I think I caused some trouble here because I thought that there was an amendment before mine. However, I have just been informed that there is not.

My amendment is Amendment No. 196B. It is intended to suggest an answer to the position of farmers whose agricultural holdings straddle the border between England and Wales. Giving the assembly power to make regulations which apply in Wales could well result, over a period of time, in those farmers facing two quite different sets of regulations for different parts of their farms. It would clearly be very difficult for the farmer to comply with two sets of regulations. For example, regulations relating to the protection of hedgerows, a matter which is certainly engraved on my heart from the previous Session, could differ as between Wales and England. The hedge in question might well run over the border.

A possible solution to this problem is to give farmers in that position the right to make an election as to which set of agricultural or environmental regulations they wished to apply to their business. That certainly applies to husband and wife under the Income and Corporation Taxes Act 1988. A right to such an election also applies in relation to the IACS scheme for farmers who farm on the border between England and Wales. As with those farmers, it would not be fair for an election, once made, to be binding for ever as conditions may change. They should therefore have the right, as husband and wife do, to make a fresh election after a period of perhaps one or two years. The Government have just considered the position of border area farmers. Does the Minister agree that they might face peculiar difficulties that could result from different legislation and different orders? What do the Government think is an appropriate remedy if mine is too greedy? I want to be in the same position as the Scots. I should like to choose whichever suits me best.

Lord Williams of Mostyn: I shall respond accordingly to Amendments Nos. 80 and 81 and also to Amendment No. 196B, which was spoken to by the noble Lord, Lord Stanley. The effect in practice of Amendments Nos. 80 and 81 would be that any function of the assembly with respect to a cross-border body or cross-border area could be exercised only with the agreement of a Minister of the Crown.

Under Clause 45, any assembly subordinate legislation that applies to English border areas will be subject to parliamentary procedures here in Westminster. The question is whether other executive functions in respect of such areas--of the kind the noble Lord, Lord Roberts of Conwy, had in mind--should be subject to ministerial agreement, given that the assembly will not be elected by or accountable to those who live in England. The answer is that it will depend on the

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detail of the functions that the assembly will have in English border areas. We have not reached final conclusions about that.

It may be that the difference between us is that we do not believe there should be a blanket requirement for every assembly function in England to be subject to ministerial agreement. There may be some functions where another approach--perhaps a requirement for consultation--would be more appropriate. The drafting of the Bill provides a menu of choices in the transfer order and we believe that that is the best way forward. But it is not always possible to find an immediately acceptable solution to all situations which may arise. If the noble Lord or any other Member of the Committee has any specific suggestions for assembly functions which should be subject to a requirement for ministerial agreement as opposed to consultation, we are more than willing to consider them. The point of detail which the noble Lord, Lord Roberts of Conwy, made about an English person wanting parliamentary redress through his or her Member of Parliament is one of those questions that needs further scrutiny. I am obliged to him for raising it.

We cannot accept that every assembly function should be subject to ministerial agreement. For instance, the Environment Agency is a cross-border body. One effect of the noble Lord's amendment would be that a direction by the assembly to the Environment Agency about its operations in Anglesey or Pembrokeshire would then have to be subject to ministerial agreement. I do not believe that anyone would consider that the proper way forward. That is one example of why I believe that our approach is a commonsense one and that we need to tease out more detail. I repeat that I am more than happy to have any proposals put forward in time for our future discussions.

The noble Lord, Lord Stanley, with his Amendment No. 196B, would allow owners of agricultural holdings--I believe the proper word is "business"--which consist of land on both sides of the border, to opt in and out where such legislation might be different in Wales from that in England. I gave earlier examples of the Moorland (Livestock Extensification) (Wales) Regulations 1995 and the Rural Development Grants (Agriculture) (Wales) Regulations 1996 where that position presently obtains. I take the point made about land rather than the operation of vehicles or livestock.

There are a few cases where a single farm lies physically on the border--apparently, there are not many. But if one looks at the small print of the amendment tabled by the noble Lord, Lord Stanley of Alderley, it refers to,

"agricultural holdings with land partly in Wales and partly in England and which are run as a single business".

That is an extremely ingenious formulation which I shall take a little further. It would be possible for someone who farms in Anglesey, for example, to have a large land holding in East Anglia. He would then be able to opt--the noble Lord has come clean--as often as every three years for the most advantageous financial consequences. I was not born yesterday. I appreciate that the noble Lord is looking for a formula which meets legitimate concerns, but with the dagger of the

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Chancellor of the Exchequer firmly pointed at my back, I believe that that is going much too far for any reasonable solution.

I believe that it would be what is called "a perverse incentive" to start buying land on the other side of the border in order to cherry pick in that way. It is not entirely dissimilar to the illustrations given by the noble Lord, Lord Molyneaux, in the context of the Republic of Ireland and Northern Ireland. However, it is a fair point that we do not want to burden businesses, whether agricultural or others.

Clause 66 is useful. It provides a very good structural, in-built discipline because it requires the assembly to carry out regulatory appraisals of subordinate legislation so that costs and benefits can be assessed and taken into account. I am not putting on one side the points which the noble Lord made. We believe that businesses, whether agricultural or otherwise, which have land on both sides of the border ought to be able to make their full contribution to those appraisals. That is a useful scheme. I recognise that quite often when legislation is passed problems arise subsequently. The scheme in the Bill is a good one. If it becomes law I hope that it will go a reasonable way towards meeting the noble Lord's points.

The question was raised by the noble Earl, Lord Balfour, as to whether the Secretary of State would be able to intervene to allow a new reservoir to be built in Wales which would serve England. I hope that I have his question correctly. Paragraph 5 of the new schedule would not allow the Secretary of State to intervene for a new reservoir to be built in Wales to serve England. The reason for that is that the compulsory purchase and compulsory works powers which would be needed are in Part VI of the Water Industry Act 1991. The override power cannot be used in relation to any functions in that Act. Obviously, if Parliament wished to enact primary legislation it would be open to Parliament to do so. If the noble Earl has any further particular matters of concern within that general area then, as always, I shall be happy to respond in writing in due course.

The Earl of Balfour: I am much obliged.

On Question, amendment agreed to.

6.45 p.m.

On Question, Whether Clause 22, as amended, shall stand part of the Bill?

Lord Simon of Glaisdale: As has been pointed out, Clause 22 is the crux of the Bill. The first point deals with the transfer of functions. I believe that many Members of the Committee will find it convenient to know what functions are at present exercised by the Secretary of State and which are not being transferred. Perhaps the noble Lord will consider that and see what can be done about it. I believe that I am pressing my luck somewhat. It would be helpful to know what functions performed by other Ministers in relation to Wales are or are not being transferred.

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The second point I wish to raise is this. It may be that I understood erroneously from the discussions on the referendum Bill that power was to be transferred over secondary legislation where the primary legislation extends to Wales. There are a number of indications in the Bill that the assembly is to deal with secondary legislation. I refer to Clauses 45, 59 and 67, and I believe that there are a number of others which apply. If the assembly has jurisdiction over all secondary legislation as far as it extends to Wales, I would have expected that to be set out specifically in Clause 22.